By Xiao Wan (China Daily)
Updated: 2007-08-25 10:03

The government has approved the sale of a 10 percent stake in the nation's biggest auto glassmaker, Fuyao Group Glass Industries (Fuyao), to the US investment bank Goldman Sachs, the Chinese company said on Friday.

A worker is handling auto glass at Fuyao Glass (Chongqing) Ltd on August 23. The government has approved the sale of a 10 percent stake in the nation's biggest auto glassmaker, Fuyao Group Glass Industries (Fuyao), to the US investment bank Goldman Sachs. [Xinhua]

The Ministry of Commerce has given the go-ahead to Fuyao to sell as many as 111.28 million new shares to Goldman Sachs, Fuyao said in a statement to the Shanghai Stock Exchange.

Fuyao said it would resubmit an application for the share placement to the China Securities Regulatory Commission on Monday because its existing one was outdated.

Last November, Fuyao said Goldman Sachs would buy a 10 percent stake for 890 million yuan.

Analysts said the deal would help Fuyao reduce its financial expenses. A domestic leader, the company is also important in the international auto glass market.

Overseas markets contributed almost 30 percent of Fuyao's 3.88 billion yuan in sales last year. The company, based in Fuqing, Fujian Province, is currently the fifth-largest maker of auto glass in the world.

Last June, Fuyao became an original equipment manufacturer for General Motors, the world's largest carmaker. Fuyao is also on a shortlist of glass suppliers for all top eight carmakers, along with Saint-Gobain in France and PPG in the US.

Company president Cao Tok-wong previously told China Daily that given the company's 60 percent share of the auto glass market in China, it is logical to look overseas.

China has become the second-largest auto market after the United States. Seven million cars are sold annually in the nation, and the market has experienced a 30 percent year-on-year growth.

Fuyao has more than 300 chain stores in large and medium-sized cities on the mainland. It has also set up subsidiaries in Hong Kong and the US.

The company's net profit was 417 million yuan in the first half of this year, representing an increase of 41 percent compared with the same period last year.

Shares of Fuyao closed at 34.9 yuan on Friday, an increase of 3.59 percent.